01/07/2013

Trust Solutions for Blended Families

Numerous
studies show a senior widower is much less likely to stay single than his
female counterpart… [and that] often leaves the question of how the father can
protect the children’s inheritance if there is a second wife in the picture. In
that case, a trust may be a man’s best friend, according to advisors.

Mixed families and second
marriages are increasingly common, and while that’s all well and good (it’s
modern life) it does create some sticky situations. Like no other era, children
are not simply ranked from eldest to youngest, and the centuries-old laws set
out to privilege marriage may end up muddying the waters and hurting the
children (adult or otherwise) of previous marriages. If you and your family
have come together differently, then it simply makes sense for you to plan
differently and appropriately in light of your unique challenges.

Financial Advisor took up the issues facing a specific type of
blended family – one created when a senior widower remarries. The role of the
widower is statistically proven to be one of the most likely to give rise to challenging
situations. More than 60 percent of men (compared to less than 20 percent of
women) are involved in a new romance or remarried within two years of the
passing of their first spouse.

What many fail to recognize is
that a new set of legal arrangements automatically apply upon remarriage, the
implications of which may conflict with previously agreed upon intentions.
Proper estate planning can eliminate, or at least mitigate, these unintended
consequences. Of course, as Financial
Advisor states, the revocable trust “may be a widow’s best friend.” A trust
arrangement can put legal muscle behind your intentions and ensure they are
carried out as you plan.

Any individual or family
entering a blended family situation should consider framing assets and rights
from the outset, and a revocable living trust is one of your most powerful tools
to do so.